I Tested this out trading Shelmet with Karrablast on an NPC and it didn't work, i also tried pumpkaboo and graveler and neither of those evolved either. Does the game recognize NPC trades as something else? I found this out when i was working on a custom regional Shelmet for a datapack, thought it was an error on my end but soon learned it applies to all pokemon. then i created a new world without any datapacks and had the same issue.

Greetings,

Indeed it doesn't.
There's actually an error in the logs when attempted to do so.
In the future please check your logs too and submit the error if it does occur.

Thanks!!